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VA Underwriting

Guidelines

VA Underwriting Guidelines | Table of Contents

05.07.2018 2

Table of Contents

MiMutual Underwriting ____________________________________________________________________ 9 Philosophy _____________________________________________________________________________________ 9 Program Description ____________________________________________________________________________ 10

Requirements and Restrictions _____________________________________________________________ 11

Loan Requirements _____________________________________________________________________________ 11 Loan Restrictions (Ineligible) _____________________________________________________________________ 11 Qualified Mortgages with Rebuttable Presumption ___________________________________________________ 11 Maximum LTV / CLTV ___________________________________________________________________________ 12

Purchase of Existing Properties ____________________________________________________________________________ 12 New Construction by Property Type ________________________________________________________________________ 12

Home Built FOR Veteran on Lot Acquired by Veteran ________________________________________________________ 12 Home Built BY Veteran on Lot Acquired by Veteran _________________________________________________________ 12 Property (House and Lot) Purchased From Builder as Package ________________________________________________ 12 Property Construction was Financed by a Construction Loan __________________________________________________ 13

Cash-Out Refinance _____________________________________________________________________________________ 13 Paying off an Installment Land Contract _____________________________________________________________________ 13 IRRRLs ________________________________________________________________________________________________ 13

Collateral Requirements __________________________________________________________________ 14

Eligible Collateral ______________________________________________________________________________ 14 Ineligible Collateral _____________________________________________________________________________ 14 Appraisals ____________________________________________________________________________________ 15

Ordering an Appraisal ___________________________________________________________________________________ 15 VA Case Number Assignments_____________________________________________________________________________ 15 VA Appraisal Assignment _________________________________________________________________________________ 15 Appraisal Requirements __________________________________________________________________________________ 16 Uniform Appraisal Dataset (UAD) __________________________________________________________________________ 16 Compliance Inspection Report (VA Form 26-1839) ____________________________________________________________ 16 Appraisal Rebuttal Process _______________________________________________________________________________ 16 Revisions Due to Sales Contract Amendments ________________________________________________________________ 17 Appraisal Portability/VA Case Transfers _____________________________________________________________________ 17 Appraisal Validity Period _________________________________________________________________________________ 17 Appraisal Delivery Requirements __________________________________________________________________________ 17

Modular Home Eligibility ________________________________________________________________________ 18 Minimum Property Requirements _________________________________________________________________ 18 FEMA Declared Disaster Area Policy _______________________________________________________________ 19 Repair Escrows ________________________________________________________________________________ 19 Required Repairs _______________________________________________________________________________ 19 Acreage ______________________________________________________________________________________ 19 Estimated Remaining Economic Life _______________________________________________________________ 19 Commercial/Industrial Zoning ____________________________________________________________________ 20 Properties Listed for Sale within the Last 6 Months (Refinances) ________________________________________ 20 Attic _________________________________________________________________________________________ 20 Crawl Space ___________________________________________________________________________________ 20 Roof _________________________________________________________________________________________ 20

Inspection and Life Expectancy ____________________________________________________________________________ 20 Snow Covered Roof _____________________________________________________________________________________ 20

Multiple Parcels of Land _________________________________________________________________________ 21 Property Seasoning _____________________________________________________________________________ 21

VA Underwriting Guidelines | Table of Contents

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Termite Inspections ____________________________________________________________________________ 21 Termite Inspections on New Construction Properties __________________________________________________________ 21

Water and Sewage Systems Requirements __________________________________________________________ 22 Individual Water Supply System (Well) ______________________________________________________________________ 22 Shared Well ___________________________________________________________________________________________ 23 Community Well _______________________________________________________________________________________ 23 Water Testing __________________________________________________________________________________________ 24 Water Purification Systems _______________________________________________________________________________ 24 Individual Sewage System (Septic) _________________________________________________________________________ 25 Distance Between the Well and the Septic System ____________________________________________________________ 25

Access to Property _____________________________________________________________________________ 25 Access to Living Unit ____________________________________________________________________________ 25 Access to Rear Yard _____________________________________________________________________________ 25 Party Walls ___________________________________________________________________________________ 26 Gas and Petroleum Pipelines _____________________________________________________________________ 26 High Voltage Electric Transmission Lines ____________________________________________________________ 26 Lead-Based Paint _______________________________________________________________________________ 26 Planned Unit Developments (PUDs)________________________________________________________________ 26 New Construction ______________________________________________________________________________ 27

Construction Warranty __________________________________________________________________________________ 27

Condominiums __________________________________________________________________________ 28

Condominium Property Eligibility _________________________________________________________________ 28 Eligible _______________________________________________________________________________________________ 28 Ineligible ______________________________________________________________________________________________ 28

Insurance Requirements _________________________________________________________________________ 28 Hazard/Liability Insurance (Project Approval) ________________________________________________________________ 28 HO-6 (Loan Level) _______________________________________________________________________________________ 29 Fidelity Bond / Fidelity Insurance (Project Approval) ___________________________________________________________ 29 Flood (Project and Loan Level) ____________________________________________________________________________ 29

Site Condominiums _____________________________________________________________________________ 30 Condominium Conversions _______________________________________________________________________ 30

Credit __________________________________________________________________________________ 31

Documentation Requirements ____________________________________________________________________ 31 Verification of Institutional Mortgage History ________________________________________________________________ 31 Verification of Rental Payment History ______________________________________________________________________ 31 Land Contract/Contract for Deed __________________________________________________________________________ 31 Lease with Option to Purchase ____________________________________________________________________________ 31

Credit Reports _________________________________________________________________________________ 31 Housing Payment History ________________________________________________________________________ 32

Purchases __________________________________________